We bought our house about four years ago and the kitchen was ugly and dated and falling apart (one reason why we got the house for a decent price). I thought I would get used to the kitchen as I am pretty frugal and can deal with a lot, but my wife was getting more annoyed with it and I was too. We are at the point now of wanting to redo it. After getting some quotes total cost will be about $20-$25k.
Forecasting out I am at the threshold of the next tax bracket and I would really rather not sell investments and pay the taxes on them. I am planning/hoping my spending will be pretty low when I retire and I can actually stay at a low enough tax bracket to not pay LTCG.
My 401k loan program at work I think is actually a decent way to do this and would love all your feedback on it.
401k loan terms are:
-No fee
-My retirement funds remain invested
-I pay a variable rate (changes once per year) based on a bond index, currently about 4.1%
I was initially very skeptical of 401k loans, but as my retirement funds remain invested these terms seem very good. Compared to HELOC and home equity loans I see through PenFed/credit unions this 401k loan seems better. Main drawbacks are:
-is that it is variable and seems rates are only going up.
-I would have to immediately pay back the loan if my employment was severed.
Me leaving my employment is extremely unlikely as my job and work is extremely stable and even if I did I could then just bite the bullet and sell my taxable investments.
Like I said, I have always been led to believe that 401k plan loans are bad news, but this actually seems like a pretty good way to stay invested and limit taxes. Am I being crazy?
Forecasting out I am at the threshold of the next tax bracket and I would really rather not sell investments and pay the taxes on them. I am planning/hoping my spending will be pretty low when I retire and I can actually stay at a low enough tax bracket to not pay LTCG.
My 401k loan program at work I think is actually a decent way to do this and would love all your feedback on it.
401k loan terms are:
-No fee
-My retirement funds remain invested
-I pay a variable rate (changes once per year) based on a bond index, currently about 4.1%
I was initially very skeptical of 401k loans, but as my retirement funds remain invested these terms seem very good. Compared to HELOC and home equity loans I see through PenFed/credit unions this 401k loan seems better. Main drawbacks are:
-is that it is variable and seems rates are only going up.
-I would have to immediately pay back the loan if my employment was severed.
Me leaving my employment is extremely unlikely as my job and work is extremely stable and even if I did I could then just bite the bullet and sell my taxable investments.
Like I said, I have always been led to believe that 401k plan loans are bad news, but this actually seems like a pretty good way to stay invested and limit taxes. Am I being crazy?